U.S. says inaction on online piracy risks public safety

WASHINGTON (Reuters) - The U.S. trade office on Thursday called for a crackdown on website name registrars who fail to take action against sellers of illegal goods such as counterfeit medicines and warned that turning a blind eye puts public safety at risk.

Alibaba Group Executive Chairman Jack Ma reacts while giving a speech at National Taiwan University in Taipei March 3, 2015. REUTERS/Pichi Chuang

The U.S. Trade Representative also said it is keeping an eye on China’s Alibaba Group Holding Ltd’s consumer shopping website for sales of fake and pirated goods, but refrained from reinstating the site on its piracy blacklist.

USTR named a domain name registrar, a company which manages the registration of internet names, for the first time in its annual “notorious markets” list as an example of concern about some registrars not taking action to block or suspend sites selling illegal goods.

The registrar, Canada’s Tucows Inc, said it took down dozen of sites every day but unlike some competitors, it considered all complaints carefully to ensure they were justified.

“We want to make sure that our registrants are protected and respected as well as making sure there are not bad actors on our system, and that requires striking a balance on a daily basis,” said Graeme Bunton, Tucows manager of public policy.

USTR cited an Interpol report which found some drugs sold online were adulterated with rat poison and said the public faced “substantial risk” in finding safe online pharmacies.

“Registrars can play a critical public safety role in the Internet ecosystem. Ignoring that role, or acting affirmatively to facilitate public harm, is of great concern,” USTR said.

It urged trading partners and ICANN, a California-based organization which oversees the introduction of new internet addresses, to “investigate and address this very serious problem.”

USTR named 25 online marketplaces and 19 physical markets in the report. It decided against reinstating Alibaba’s consumer-to-consumer shopping website Taobao.com, which was removed in 2012, and said it would continue to monitor the site.

An Alibaba spokeswoman said the company was dedicated to the fight against counterfeits. “We work closely with our government partners, brands and industry associations to tackle this issue at its source,” she said.

Alibaba says it spent more than 1 billion yuan ($160.7 million) combating fake goods and improving customer protection from the beginning of 2013 to the end of November.

But a Chinese regulator said in January many products sold on Alibaba sites infringed trademarks, were substandard or fake.